In Metropolitan Life Insurance Company v. Gorman-Hubka, Judge Ellis of the Eastern District of Virginia considered a beneficiary dispute between the ex spouse and the sisters of the decedent. The insurance company, Metlife, filed the interpleader in federal court after receiving rival claims to the policy benefits.
The decedent had named his ex wife as beneficiary, prior to their divorce. The parties disputed whether he made substantial efforts to naming her again as the beneficiary after the divorce.
The court first analyzed whether ERISA applied to the policy. As in most life insurance beneficiary disputes, this analysis was critical. Virginia law would automatically revoke any designation in favor of an ex spouse made prior to the divorce. However, federal law would preempt the Virginia statute if the policy was covered by ERISA.
Examining the details of the policy, Judge Ellis found that the policy was not covered by ERISA. Therefore, Virginia law applied and the designation in favor of the ex spouse was automatically revoked by the divorce.
However, that was not the end of the case. The ex spouse contended that the insured had intended to designate her again after the divorce, but was allegedly told by a representative of Metlife during a phone call that he did not need to do anything to keep the ex spouse as the beneficiary. It turned out that guidance was misleading. But the court was not persuaded that the insured took all reasonable steps necessary to designate his ex wife after the divorce. Therefore, the decedent's sisters prevailed.